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Long Term Market Analysis: Prolong Drawdown in Singapore and S&P 500 $SPY $EWS

We take a look at the long term charts again today.

The key here is that since our last analysis in May, Singapore markets have been doing what I have highlighted, which is hanging around and drifting lower.

The 13 week EMA and 43 week EMA are coming together soon. I see either

  • a continual consolidation in weekly prices and a break up or a break down after that
  • or a sharp draw down starting next week

Both occurrence have a high likelihood to create a death cross with the 2 weekly moving average which will point to long term downside.

Price target then would be 2750 at the 200 EMA representing a 10% draw down from here.

The other possibility is for a break up after the consolidation. Look for prices breaking above the falling peaks (red line) as an indication to go long. This will be a resumption of the bull market.

Looking at the S&P 500 action, we see the 17 EMA starting to turn down as well and we need to be aware that we are looking at weekly charts which means the inertia to change directions readily is very small.

Together with the distance between the 17 and 43 day EMA, I do favor that the market will move sideways for a while before things become clearer.

Portfolio Changes

My decision in recent actions have been to cut out most of the growth and volatile counters that are bought pretty high and take profits to a comfortable level. I still have some more to do.

You can take a look at my recent transactions on my current portfolio here.

There should be a bounce somewhere now so it will be a place to consolidate your portfolio.

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